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OTC Meds OK Expenditures from Health Care Accounts

WASHINGTON-Treasury and the Internal Revenue Services announced last week that withdrawals from health card flexible spending accounts are appropriate on over-the-counter medications. Treasury and IRS issued guidance clarifying that reimbursements for nonprescription drugs by an employer health plan are excluded from income and, therefore, acceptable for FSAs if properly substantiated...

By Staff Writer | Updated on September 16, 2003

WASHINGTON-Treasury and the Internal Revenue Services announced last week that withdrawals from health card flexible spending accounts are appropriate on over-the-counter medications. Treasury and IRS issued guidance clarifying that reimbursements for nonprescription drugs by an employer health plan are excluded from income and, therefore, acceptable for FSAs if properly substantiated by the employee. “Flexible Spending Accounts are an important tool in helping people meet their health care costs,” Treasury Secretary John Snow stated. “Since many prescription drugs have moved to the over-the-counter market, this action today makes paying for them a little bit easier to swallow.” “This action is a sensible expansion and simplification of the program consistent with existing law,” IRS Commissioner Mark W. Everson said.

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